NZD/USD rallies in the short term after the failure to retest the near-term support levels. It is trading at 0.6137 level and most likely will continue to increase and will make another higher high.
The USDX's drop has demolished the dollar, which has decreased versus most of its rivals. USDX plunged after the failure to reach the 100.00 psychological level, we'll see what will really happen in the upcoming period because the dollar index is trapped within an extended range, so only a valid breakout from this pattern will give us a clear direction of the dollar.
NZD/USD has managed to come back above the 50% retracement level after it has failed to retest the broken outside sliding line (sl - descending dotted line), and the PP (0.6047) level. The pair is located within a resistance zone, it is still traded below the 0.6174 higher high.
The outlook is bullish as the price has escaped from the descending pitchfork's body and has ignored the outside sliding parallel line (sl). The valid breakout above the sliding line (sl) has confirmed a further increase. Support is seen at 0.6080 previous low and at the Pivot Point (0.6047) level.
- NZD/USD Trading Tips
The failure to retest the sliding line (sl) has signaled a bullish momentum, the aggressive breakout above the 50% level has suggested buying in the short term, the next target is seen at the R1 (0.6253) level.
We could have another long opportunity if NZD/USD closes and stabilizes above the 0.6157 - 0.6174 area, if it makes another higher high. This scenario could announce an increase also towards the R2 (0.6380) level.
Another short opportunity could appear if NZD/USD decreases and closes below the 0.6080 previous low. A false breakout with a huge separation above the 0.6157 - 0.6174 area will bring a short opportunity as well.
The material has been provided by InstaForex Company - www.instaforex.com